War-Time Financial Problems eBook

Such are the suggestions made by this distinguished
body for the restoration of our currency. Little
has been said against them in the way of serious criticism,
but their conservative tendency and the fact that
they practically recommend a return to the status
quo has caused some impatience among the financial
Hotspurs who proposed to begin to build a new world
by turning everything upside down. In matters
of finance this process is questionable, interesting
as the result would undoubtedly be. To get to
work on tried lines and then, when once industry and
finance have recovered their old activity, to amend
the machine whenever it is creaking seems to be a more
sensible plan than to delay our start until we have
fashioned a new heaven and earth, and then very probably
find that they do not work. If the machine is
to be set moving, it can only be done by close co-operation
between the Bank of England and the other banks which
have grown by amalgamation into institutions the size
of which seem likely to make the task of central control
more difficult than ever. On this important point
the Committee is curiously silent. But it recommends
the adoption of a suggestion made by a Committee of
Bankers, who proposed that banks should in future
be required “to publish a monthly statement
showing the average of their weekly balance-sheets
during the month.” (Will this requisition apply
to the Bank of England?) This is a welcome suggestion
as far as it goes, but unless something is done by
co-operative action to make the Bank rate more automatic
in its influence on the actions of the other banks,
the difficulty of making it effective seems likely
to be considerable.

Getting the currency right is a most important matter
for the future of our financial position. Another
is the question of our debt to foreigners. Most
of this debt we owe to America, and we only owe it
because we had to finance our Allies. We surely
ought to be able to arrange with America that anything
that we have to do in giving our Allies time before
asking for repayment they also should do for us—­within
limits, say, up to thirty years. In view of all
that they have made and we have lost by this war waged
for the cause of all mankind, this would seem to be
reasonable concession on America’s part.

XVII

MEETING THE WAR BILL

January, 1919

The Total War Debt—­What are our Loans to
the Allies worth?—­Other Uncertain Items—­The
Prospects of making Germany pay—­The Right
Way to regard the Debt—­Our Capital largely
intact—­A Reform of the Income Tax—­The
Debt to America—­The Levy on Capital and
other Schemes—­The only Real Aids to Recovery.